Community Trust Bancorp (NASDAQ:CTBI) Will Pay A Larger Dividend Than Last Year At $0.46
Community Trust Bancorp, Inc. (NASDAQ:CTBI) will increase its dividend from last year's comparable payment on the 1st of October to $0.46. This takes the dividend yield to 4.7%, which shareholders will be pleased with.
Check out our latest analysis for Community Trust Bancorp
Community Trust Bancorp's Dividend Forecasted To Be Well Covered By Earnings
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Community Trust Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Community Trust Bancorp's payout ratio of 39% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS is forecast to fall by 10.7%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 46%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Community Trust Bancorp Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $1.15 in 2013 to the most recent total annual payment of $1.84. This means that it has been growing its distributions at 4.9% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
We Could See Community Trust Bancorp's Dividend Growing
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Community Trust Bancorp has impressed us by growing EPS at 7.1% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
We Really Like Community Trust Bancorp's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Community Trust Bancorp that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
